In the comments section of Jonathan Newman’s article on tiny houses today, “JC” writes: “The graph covers a period of time when there was vast expansion into the suburbs and beyond. Land in these areas was relatively cheap compared to the tiny pre-war lots found closer to urban centers.” JC’s point is that in addition to the points Newman correctly covers, we can also note that the emergence of cheap land after WWII accentuates the rise of larger houses with which the tiny house now so thoroughly contrasts.
This is a good point. Indeed, you don’t have to have a PhD in urban studies to notice that single-family houses in the suburbs are considerably larger than the single-family houses in the old city centers, or the pre-war inner suburbs. Part of this is due to the increase of household wealth from 1945-1970 (or so), but much of it is also due to the fact that the outer suburbs are simply more spacious with wider streets, homes further back from the street, and larger lots in general. Those housing styles behind those old houses built during the 1910s and 20s in urban areas, which were literally inches away from the houses next to them, and had tiny front yards, completely disappeared durign the 1960s, 70s, and 80s. They only re-appeared with the rise of new urbanism during the 1990s, which continues today.
And as JC pointed out, some of this — although certainly not all of it — can be explained by the rise of cheap spacious land and housing lots after WWII. But, the rise of such real estate cannot be explained solely by increasing incomes after the war.
The rise of the spacious low-density suburbs is very much a creation of the rise of big government after WWII and the New Deal. The rise of the “freeway” after 1940 is what enabled populations to live in suburbs and still commute to employment centers. Prior to this period (and today), most everyone wanted (and wants) to live somewhere that wasn’t too close to the smells and problems of dense urban areas, but which nevertheless was close enough to allow a bearable commute to work. 100 years ago, the street car allowed cities to expand and allow working class people to live outside the city center. But even then, mid-level density remained a necessity because the infrastructure to allow for huge sprawling metro areas was simply too expensive.
Automobile ownership massively expanded after the war, but the infrastructure remained way behind. It was still too hard and time consuming to work downtown and live in the suburbs. The business boosters (i.e., the Chambers of Commerce) of the Los Angeles area presented the solution to this problem in 1940 with the construction of the Pasadena Freeway, the first major thoroughfare connecting a downtown urban center with a relatively far-off suburb.
The project eventually became funded by the State of California, which meant that people who lived no where near Los Angeles were paying for it. But of course, the need to come up with state funds for such projects was soon surpassed with the dawn of the Interstate Highway system in which the federal government poured money into Eirenhower’s plan for an American autobahn. Over time, these massive changes in government-funded infrastructure allowed metro areas across America to build far-flung suburbs where people (i.e. developers) could buy much cheaper lots than could be found in the inner suburbs, and in much larger numbers than ever before. Moreover, the highways were supplemented with huge government-funded projects to extend sewage, electrical, and water lines to the new developments.
While this movement was nationwide, it was most obvious and widespread in the American West where cities had been small before the war. New residents flooded into the west coast and the southwest after the war, and here we see cities that have become primarily new suburbs dependent on government-funded highways and infrastructure.
The good ol’ days have come to an end, however, and this is where the tiny house movement becomes important. From 1945 to 1970, governments at all levels were flush with cash, and the feds lavished the country with new highways, new water projects and grants for more infrastructure. Local governments spread the marmalade around as well. Since the 1980s, though, growth in real income (and hence,tax revenue) isn’t as easy to come by and government has now required developers and homeowners to provide a greater share of the burden in new development. “Tap fees” (for new water lines) and “development fees” for the cost to local government of maintaining new roads and sewer lines) have become enormous, totaling tens of thousands of dollars per house in the suburbs. New homeowners may now be paying as much as $20,000 to $50,000 of the cost of a new house for the infrastructure. On top of this, federal dollars for new highways is relatively less than what it was during the good old days.
Chambers of Commerce and other ostensibly “private” sector groups furiously lobby for more government money to subsidize the suburban workforce, but the real costs to buying into the world of suburban homeownership has become costlier. As a result, the cost of building a huge house is beginning to better resemble what it was back when housing development was actually driven by private sector considerations and not by an enormous patchwork of government subsidies.
What we are likely to see over time because of this is smaller houses, smaller lots, and more density. We’ve already seen much of this trend at work over the past 15 years or so. and some of it is being forced by control-freak politicians on planning boards of local governments. Thus, many dismiss this as nothing more than trendy new urbanism, but the economic factors underlying it are far beyond any hippie dippy fashion statement that urban planners might be dreaming up.
For a good primer on the economics of these phenomena, check out Randall Holcombe’s book Public Policy and the Quality of Life.
